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FBR to launch pilot project to monitor payment of taxes by cellular companies

FBR to launch pilot project to monitor payment of taxes by cellular companies

ISLAMABAD: The Federal Board of Revenue (FBR) is going to launch a pilot project for real-time connectivity to monitor the tax deduction by cellular companies as well as payment to the government by the end of current month (January).

In this regard, the FBR has established a new Intelligent Tax System with the help of PRAL (Pakistan Revenue Automation (Private) Limited) which will help analyze the exact data of taxes collected by the mobile phone operators. Through this system the exact usage and taxes collection process will be properly monitored by the FBR,” a source at FBR told Customs Today.

A mechanism is being worked out and in three to four months which will help the FBR analyze the details and figures collected on account of withholding tax from cellular phone subscribers and the mechanism adopted for returning the same to them.

The source said that these mechanism were being developed in the backlash of reports that billions of rupees were being collected on account of GST, WHT and service charges from cellular subscribers, even those poor people of Pakistan who did not fall under the tax network. Moreover, FBR has still no mechanism to analyze the data of taxes collected by Telcos resultantly the FBR has not been able to further transfer relief to the common men.

In October last, as per the tax directory issued by Federal Board of Revenue for tax year 2015 top taxpaying companies in telecom sector were Pakistan Telecommunication Authority paid a tax of Rs 4,099,991,326, Telenor Communications (Private) Limited (Rs 1,423,170,667) and Telenor Pakistan (Private) Limited Rs 3,020,783,526.

Similarly, in February last FBR declared the telecom sector as one of the highest tax paying sectors in terms of withholding taxes. In Finance Act 2015-16, the government increased sales tax on import of different varieties of mobile phones by 100 percent.  The sales tax applicable on various categories of imported mobile phones is increased from Rs 150, Rs 250 and Rs 500 to Rs 300, Rs 500 and Rs 1,000, respectively. Regulatory duty imposed on the import of mobile phones will be withdrawn once new rates are implemented.

Rates of various taxes charged from consumers include 14% withholding income tax on the amount of bill or sale price of internet prepaid card or prepaid telephone card or sale of units through any electronic medium or whatever form and 18.5% federal excise duty on telecom services (Islamabad territory).